Regulating Social Media

Following a complaint to the Australia Advertising Standards Board, a judgment was made that comments by “fans” on Smirnoff Vodka’s Facebook page were considered “advertisements” and must therefore comply with industry regulatory codes and consumer protection laws.

The watchdog heard that a fan of the Facebook page commented that Smirnoff was “the purest Russian vodka” and would lead to success with the opposite sex. John Swinson, a partner at law firm King & Wood Mallesons explained to The Age that Smirnoff is Australian, not Russian and it may not be the purest. The comment also implies that you would have greater success with girls also contravenes Australian advertising codes. Industry codes not only apply to what a company posts on its Facebook page, but also to user-generated comments that followed. As the comments weren’t removed, Smirnoff was held liable for the actions of its “fan”.

Brands are increasingly relying on Facebook “word-of-month” to reach, not only fans, but also their social circles. There is currently very little legislation that governs the use of social media by brands and the decision handed down to Smirnoff just a few weeks ago has already caused havoc in the corporate world. Particularly for larger companies, constantly monitoring social media pages is impossible.

Activity can’t be completely controlled, but it can be managed. When a member of the public posts a complaint or an inaccurate statement on Facebook, companies need to respond immediately clarifying the issue. The problem facing corporations and their adverting agencies is that the Internet doesn’t close down at 5pm everyday nor does online activity cease over the weekend. If anything, user activity on social media increases after business hours. This poses a great challenge particularly to large corporations like Smirnoff who have a following of over 180 000 people.

Recent consumer trends would suggest that the risks of social media are only minor compared to its benefits. Consumers are increasingly using the Internet, and in particular Facebook, to research brands and products before making purchases. 85 per cent of Australians who are connected to the Internet use it as a resource to research, compare and seek advice about their shopping. 61 per cent use search engines, 50 per cent check the brand’s website, and 23 per cent use Facebook (source). I would challenge the last figure. Realistically, it is probably higher considering that a Google search will return the brand’s Facebook page and brand websites have links to their social media pages. Most consumers may not be going directly to Facebook, but they are certainly being directed there.

It is impossible to completely control the activity of users and fans, but strategies should be implemented to manage activity on public pages. Companies don’t have a choice: they need to be using social media as a marketing tool to positively promote their brands and now they must also comply with rapidly evolving standards and legislation.